Alibaba.com CEO and COO to resign after fraud investigation

The head of Alibaba.com, an operator of e-commerce and more in China, has resigned following an internal investigation has found that an increase in fraudulent transactions at the company.

CEO David Wei has resigned from Alibaba.com, Business-to-business commercial platform group Alibaba Chinese e-commerce giant. Replacement of Wei will be Jonathan Lu, CEO of the largest online retailer, Taobao.com, China's Alibaba. Alibaba.com also chief operating officer Elvis Lee has resigned.

The investigation established that Wei and Lee were not involved in any fraudulent activity.

From resignation, Wei Lee wanted to take responsibility for fraudulent activities carried out by users on the site.

Monday, Alibaba released a statement saying that the senior management at the company had noticed an increase in claims of fraud by buyers against its customers China Gold supplier.

Fraud had begun at the end of 2009 and continued throughout the year. The number of suppliers engaged in fraud including 1219 who had signed in 2009 and 1107 who had signed in 2010. The company has taken steps to end the virtual shop suppliers.

"In general, the sites offered the high consumer demand at very interesting prices, minimum order quantity and less reliable methods of transferring payment." Alibaba said in a statement. "The average value per claim by buyers against fraudulent vendors was less than US $ 1, 200".

Sales of about 100 people, a number of sales managers and supervisors had allowed fraud to circumvent the measures of control of the company intentionally or negligently, Alibaba added. Fraudulent activities had no "material financial impact on society.

Under the leadership of Wei, Alibaba.com had worked to expand its services globally. Last year the company had made acquisitions of two e-commerce company, and in the United States. The objective was to use them to help pave the way for U.S. small businesses source their products through the resources of the e-commerce Alibaba.